If the price of tennis rackets were to increase, we would expect:
a. the demand for tennis balls to increase
b. the demand for tennis balls to decrease.
c. the supply of tennis balls to increase, leading to a movement along the demand curve for tennis balls.
d. the supply of tennis balls to decrease.
b
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A major difficulty with the infant industry argument for protection is that
A) government revenue will fall with a tariff. B) it requires the nation to fall into the large country case for tariff protection. C) effective rates of protection are usually greater than nominal rates. D) the measurement of production externalities is hard and uncertain. E) the productivity of infant industries is usually declining.
Which of the following is false?
A) Economists who believe that the AS curve is vertical assert that changes in Real GDP originate only on the supply side of the economy. B) Economists who believe that the AS curve is upward-sloping assert that changes in Real GDP originate only on the supply side of the economy. C) For economists who believe that the AS curve is upward-sloping, government policy that aims to impact either side of the economy (supply or demand) will change both prices and Real GDP. D) Compared to the economists who believe that the AS curve is upward-sloping, the economists who believe that the AS curve is upward-sloping assert that the government has fewer tools with which to change Real GDP.
In the current debate over fiscal policy, advocates of returning to significant budget surpluses
A) contended that the economic miracle of the late 1990s caused the budget surpluses. B) think that tax cuts will benefit the wealthy. C) believe that tax cuts will continue the dependence of the United States on borrowing from foreigners. D) All of the above.
A transaction between A and B benefits both parties by 50, but imposes a cost on C of 20. C has the right to prevent the transaction. A "coordination failure" in this situation
A) is the cost imposed on C. B) is the ability of C to prevent a transaction that still has a net overall gain of 80. C) would occur if A and B do not compensate C by 20 or more to allow the transaction. D) is that the cost to C is not 100.